How to Show Cost Data in Presentations

Contents

How to Show Cost Data in Presentations

Introduction

In industry, managers are responsible for many projects. They are well aware
that most projects do not fail for technical performance reasons, but usually
fail because of problems with costs or schedule. Because of this, they pay
extremely close attention to cost data given in presentations.

In these presentations, managers are looking for two major items. First,
they're looking at the data itself to see if it's within the parameters
established for the project. Second, and possibly more importantly, they're
looking to see if the presenter has firm control over the project cost data, and
is well aware of how the project is doing financially. If they are not confident
on the second issue, they will not trust the cost data being shown to support
the first issue. Therefore, it is critical that you be able to present cost data
effectively, and give the impression of confidence.

Managers are usually not interested in the details of cost data, but want to
be able to see how overall costs are derived. They're happy when they see the
clear "chain of evidence" in a presentation, especially when the numbers are
good. If the numbers are not good, i.e. costs are increasing or beyond the point
where we can make a profit, managers may still be willing to give a project
person a chance to correct the situation if they think the presenter is in
overall control of the situation and understands the costs. If they have no
confidence in the presenter, even if the numbers they show are good, they'll
have no confidence that the numbers are actually correct. Worse, if the numbers
are not good, they'll get the feeling that the situation is out of control,
something that usually does not lead to significant career growth.

This page will act as an introduction on how to present cost data well, and
therefore be able to gain confidence.

Overall Format

First of all, cost data is so important that it should have its own slide. It
may be tempting to save time by including cost data as part of the materials list
or in another part of the presentation. You should not do this. It makes it
difficult for your teacher to understand the data, especially when various
quantities of material are used. It is also not done this way in industry. Make
sure this data gets the respect it deserves by giving it its own slide.

The overall format of cost presentation is very easy. The format consists of
four columns. The first column is the item being reported, sometimes with the
"unit of measure" shown as well, usually in parentheses. The unit of measure is
how the item is priced. For example, if you're showing the price of a gallon of
gasoline, the unit of measure would be a gallon. However, if you're showing the
price of a dozen eggs, in most circumstances the unit of measure would be a
dozen (the usual way eggs are sold). For many tables, the only unit of measure
is "each". However, for some tables several different units of measure are used.
For example, some items might be priced by the set, by the dozen, by length (feet
or meters), or by area (square feet). When several different units of measure are
used, you should add a separate column showing the unit of measure in order to
make the table easier to read. If this column is present, it usually has a header
of "U/M" (the abbreviation of Unit of Measure) to save space. The next column
is the cost for each unit of measure. For example, if gasoline is $2.69 per
gallon, the price shown would be $2.69. The next column is the number of units.
Finally, the last column is the "extension", which is nothing more than the cost
per unit multiplied by the number of units. Each column also has a header showing
what the column contains.

Finally, the total cost for the project is shown in the bottom right corner
of the table, and is the sum of the extensions. Figure 1 shows a typical table
of costs that would be shown for a project. Note that in this case, only one
item has a unit of measure other than "each", so we can just show it in
parentheses next to the item.

Item

Unit Cost

Quantity

Total

Fuselage

$10000.00

1

$10000.00

Wings

$5000.00

1

$5000.00

Tail

$1000.00

2

$2000.00

Elevators

$500

2

$1000.00

Labor (hours)

$50.00

100

$5000.00

Grand Total

$23000.00

Figure 1: A typical Cost Table

Figure 2 shows a more complex cost table where several different units of measure
are used:

Item

Unit Cost

U/M

Quantity

Total

Fuselage

$10000.00

Each

1

$10000.00

Wings

$5000.00

Pair

1

$5000.00

Fabric

$20.00

Sq.Ft.

100

$2000.00

Cable

$5.00

Foot

200

$1000.00

Labor

$50.00

Hour

100

$5000.00

Grand Total

$23000.00

Figure 2: A Cost Table with several units of measure

Note that numbers are always right adjusted and test is always left adjusted.
There may occasionally be exceptions to this rule, but it is a good starting
point. Also, notice how the column headers are made different in some way to
indicate that they are not data themselves. This is typically done by making the
column headers bold test.

For the bottom row, if possible do not show the empty cells; just show the
"Grand Total" caption and the overall total for the project.

Additional Issues

This project is very small, and therefore all the data easily fits on a
single slide. For larger projects this will not be possible. Although managers
may be interested in the detailed data, it is still a good idea to present the
overall project costs on a single slide. This means that we might have to
summarize individual items into groups to show the overall situation.

In this case, when we look at the detailed sheet, we usually see several
items which have large costs associated with them. Even a small change in cost
on these items can have a major impact on the overall costs of the project.
Then, there are a number of minor items, typically involving large quantities,
which do not contribute significantly to the overall cost. Frequently, these
items are commodities, and therefore do not have significant price fluctuations.
In this case, we can group these kinds of items together. Using RoboLAB parts as
an example, the RCX block, motors, and sensors typically have a major impact on
the overall project cost. On the other hand, things like bricks do not.
Therefore, what we'll do is continue to show the high cost items on a line of
their own, but lump the low cost items together.

There are several ways we can lump the low cost items. The first way is to
lump them by type. For example, we might have a single line of "Bricks" and the
total cost for all the bricks In this case we won't show a unit cost or quantity
since the overall total will be the sum of a number of all the different kinds
of bricks. Another way to group the items would be by major component of the
project. For example, we might have a single item of "Gear Train" which consists
of all the gears and axles that are involved, and their overall cost. Usually
the type of project will guide you on which format to use In any case, with
enough summarizing, you should be able to get the overall project cost onto a
single slide. However, you should be ready to present the detailed costs if the
management wants to see them.

Another issue is the "unit of measure". In most circumstances, the default
unit of measure will be "each", so it's not shown. Any different unit of measure
(e.g. "pair" for socks, "dozen" for eggs) etc. would be shown in parentheses
behind the item. Some companies like to show the unit of measure separately from
the item. In this case the item will be in the first column and the unit of
measure will be in the second column. The unit of measure for each line is
usually shown, even when it's clear wheat the unit of measure is (i.e.
"each").

Summary

This format is typical of the formats used in industry. It gives the audience
a good idea of the cost information, and also gives them confidence that you
have a good grasp of the cost data. As you gain confidence with this format you
may want to improve upon it. This is only the beginning of an important
topic.